A property management group is interested in diversifying its company to operate properties for low-income housing, but the grou
p members are nervous about the impact on the brand of high-end apartment developments where they have been operating. What strategy should the property management group use to diversify but keep control of both divisions?
Options:a. Unrelated diversification b. Related diversification c. Internal new venture d. Joint.
Answer:b. Related diversification
Explanation:Related diversification is a system of diversification where a business Organisation diversifies its operations into product lines or brands that are similar to what it is already Manufacturing or marketing.
The property management company has already been involved in property management,but in this case it is for High income earners,since it is now interested and wants to diversify to property management for low income earners,this approach to diversify is called RELATED DIVERSIFICATION.
Diseconomies of scale are when production output increases with rising marginal costs. ... Fixed costs do not change with increases/decreases in units of production volume, while variable costs are solely dependent, which results in reduced profitability. They show how well a company utilizes its assets to produce profit.
When there are more substitutes for a product, the demand for the product is more price elastic. The implication of this is that the demand of such product will drop when there is increase in it price because people can get another product which will play the same role with the previous at a lesser price. Hence, the demand for the product vis more price elastic.
it ensure good financial management as it requires a valid appropriation to spend an amount. it means the budget authority to the government is subject to a valid purpose. this legal rule helps to curtail unnecessary spending and assure that funds go where they are most needed
